Lisa Cook Sues Trump as Second Criminal Referral Issued

The ongoing legal battle between Federal Reserve Board Governor Lisa Cook and former President Donald Trump intensified recently, as the Trump administration filed a second criminal referral against Cook for alleged mortgage fraud. This development coincides with Cook’s lawsuit against Trump, which challenges his attempt to dismiss her from her position.

On August 26, 2023, William Pulte, director of the agency, submitted the initial criminal referral to Attorney General Pam Bondi, accusing Cook of committing mortgage, bank, and wire fraud. Specifically, Cook is alleged to have signed two mortgage documents for properties in Michigan and Atlanta, claiming both as her primary residence. The documents were purportedly signed within a two-week period during the summer of 2021.

The recent referral points to a third property located in Cambridge, Massachusetts. According to Pulte’s statement on social media platform X, Cook misrepresented this property on a 15-year mortgage document in December 2021, labeling it as her “second home.” Shortly thereafter, she reportedly listed it as an “investment/rental property” on a U.S. ethics form.

The backdrop to these allegations is Trump’s move to terminate Cook’s position, which he initiated on August 28, citing the first criminal referral as grounds for her dismissal. Legal experts have raised questions regarding the legality of this action, particularly as it pertains to the Federal Reserve Act, which mandates a showing of “cause” for a governor’s removal. Cook’s lawsuit argues that Trump’s actions are without precedent and infringe on her rights.

In her legal filing, Cook states, “This case challenges President Trump’s unprecedented and illegal attempt to remove Governor Cook from her position, which, if allowed to occur, would be the first of its kind in the Board’s history.” The suit also contends that the allegations against her stem from documents submitted prior to her Senate confirmation, which should not serve as valid grounds for dismissal.

Cook seeks immediate declaratory and injunctive relief, aiming to affirm her status as a member of the Board of Governors and protect the independence of the Federal Reserve. The lawsuit names Trump, Federal Reserve Chairman Jerome Powell, and the Board of Governors as defendants. A hearing for a temporary restraining order is scheduled for 10 a.m. EDT on August 29, 2023, in front of Federal Judge Jia Cobb.

The legal action also requests that Trump recognize her as an active Fed governor and asserts that board members can only be removed for cause as outlined in the Federal Reserve Act. Additionally, Cook’s legal team is seeking reimbursement for costs incurred during the action, along with reasonable attorney fees.

Trump’s actions come amid a broader context of political tensions, as he has previously indicated intentions to retaliate against political opponents. This includes stripping security clearances from lawyers associated with rival figures. Notably, two other Trump’s critics, New York Attorney General Letitia James and Senator Adam Schiff of California, have also faced allegations of mortgage fraud from the Trump administration.

Democrats have voiced strong opposition to Trump’s attempt to dismiss Cook, arguing that it represents an illegal overreach of executive power. Senator Elizabeth Warren, D-Massachusetts, expressed concern that Trump aims to transform the Federal Reserve into a “Central Bank of Trump.” She emphasized the importance of maintaining the Fed’s independence, stating that “the Fed makes decisions based on economic data — not political pressure.”

As this situation unfolds, the implications for both Cook and the Federal Reserve remain significant. The outcome of the lawsuit could set a precedent regarding the removal of Federal Reserve governors and the balance of power between the presidency and independent financial institutions.